The “Do-Over!”: Reinventing Your Failing Business

Posted in July 16, 2009 ¬ 1:56 pmh.rachelComments Off

In New York City foodie circles, Locanda Verde is kind of a big deal. One of the hottest new restaurants of the spring, those who are lucky enough to get reservations have been raving about it. Located on a prime corner in Tribeca, in Robert De Niro’s new Greenwich Hotel, Locanda fits in perfectly with the neighborhood scene—stylish 30- and 40-somethings in creative industries intermixed with bankers and lawyers trying to look like creative-types.

However, a year ago people were singing a different tune. The restaurant that the hotel opened with, Ago, did not fair so well. It was much anticipated, with LA chef Agostino Sciandri at the helm. A large, fancy Italian restaurant, it was sure to attract investment bankers with (dwindling) expense accounts, but there wasn’t much of a lure for other types.

Last May, my husband and I decided to go to Ago with some friends. We joked about the one review we found that said the huge bar was filled with, “high-fiving, martini-drinking Wall Street types.” This is not a compliment. Sure enough, we walked into a huge, loud space with lots of pre-bailout suits spending to impress. The six of us were seated at a table about 8-feet wide. My Bolognese sauce tasted watered down. That’s about all I remember of the experience. We left in no rush to return.

It wasn’t a surprise, then, when we heard Ago was being closed. De Niro pulled the plug before it ever had the chance to warm up or go down in flames, though it’s easy to guess in which direction it was headed. The hoteliers and partners brought in new talent—new managers, new chefs (including my favorite pastry chef in the city, Karen DeMasco.) They made subtle changes to make it more cozy—adding shelves to break up the large space and smaller tables for intimate conversation.

On a recent Saturday, my husband and I went to Locanda and ate at the bar (not a single high-fiving Wall Streeter in sight, though, granted, they don’t have much to high five about anymore.) We had an excellent meal—fresh ricotta served with grilled bread, fava bean crostinis, lamb meatball sliders, fig and arugula salad, fried artichoke hearts and asparagus ravioli. It was casual, not that expensive, and tasty.

The next day, our neighbors brought Locanda’s fresh ricotta to a block party. I still couldn’t get enough. Wednesday night, we were back there again with some friends—one of the couples who we originally dined at Ago with. Our friend Samantha turned to us and said, “way to go, De Niro, for calling ‘do-over!’ and turning things around so quickly!”

It’s true, to use a golf analogy, it’s like they shanked the ball with Ago, called a mulligan, and hit a 300-yard drive before anyone could linger on the initial embarrassment. In terms of business, this may be decidedly less easy for those of us with shallower pockets than Mr. De Niro, but there are still some lessons to be learned here:

Don’t let your pride get in the way. People make mistakes. Even successful business people. Sometimes they are expensive mistakes, but you have to own up to them. Figure out what went wrong or why your idea didn’t work. Then do something about it—before it’s too late.

Know your customers. It’s not just about who you’ll attract in your first few months, but who will be the long-term, loyal customers that will make your business sustainable? What is it that THEY want or need?

Don’t get greedy. Sometimes it’s a matter of starting off smaller and working your way into success more slowly. In this example, when Locanda reopened, they took a large back part of the first restaurant and closed it off to reserve for private parties. They may not be able to seat as many covers per night as Ago did, but they created a more intimate, but crowded and lively, atmosphere. Once they’ve picked up enough traction, then they can decide to open the back room for diners, if the demand is there.

Make it quick. Be decisive. My father used to say, “a boat is just a hole in the water you pour money into.” For better or for worse, I think that quote applies to small businesses as well. Some people continue to throw more and more money at their business hoping that will make it stay afloat, when really there’s a fundamental problem. Problems have to be dealt with quickly and decisively, or else your business will sink.

Especially in the current economic climate, nothing is more important to your success than having happy customers. If and when you do make mistakes, the way you react will make or break your business. Second chances can be hard to come by, especially in competitive industries, but by telling your customers, “I hear you, and we’re doing something about it” you’ll get your chance for a do-over.

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Rachel Thebault

Rachel Schifter Thebault, founder of Tribeca Treats, spent seven years as an investment banker before transforming her side hobby of making truffles for friends into a full-time career in confections.

A graduate of the Institute of Culinary Education, she opened Tribeca Treats in 2007. The bakery has won honors from American Express OPEN and entrepreneur organizations, and is a pillar of the Tribeca community.

A sought-after speaker and panelist, she has also taught cooking and baking to children. She currently lives in Tribeca (and travels the globe) with her husband and their two daughters.